Spark has a 5G plan – now it’s the NZ government’s turn

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Image credit: Shaun Jeffers / Shutterstock.com

Incumbent telco Spark New Zealand has released a paper outlining its plan to launch 5G services starting in 2020 – provided the NZ government provides sufficient spectrum and pro-5G policies.

The paper – aimed at investors, consumers, and policymakers – mostly explains what 5G is and what it can do that 4G can’t, but also outlines Spark’s preparations for 5G evolution and what has to happen on the policy side of the equation.

Managing director Simon Moutter said Spark’s technical and network planning for 5G is advancing after successfully conducting outdoor and indoor trials earlier this year.

“We are undertaking detailed planning to ‘map’ expected 5G cell site densities in New Zealand and, as a result of this planning (and the learnings we have taken from our 5G testing), we are forming a good understanding of how many new sites we will need for 5G, and where,” Moutter said. “We have already begun a build program to increase the number of cell sites in our existing mobile network – which will enable us to meet near-term capacity demand as well as lay the groundwork for network densification required for 5G.”

Moutter added that 5G will enable Spark to provide additional capacity at a lower incremental unit cost than under 4G and 4.5G. “This means that once 5G is available to deploy, we will have a strong commercial incentive to rapidly build 5G network capability as the primary means of keeping ahead of growing customer demand for more data at faster speeds.”

Spark says it expects to fund 5G network development (excluding spectrum and any material move towards widespread rollout of new cell sites using high frequency mmWave band spectrum) within its existing capex envelope of 11%-12% of revenues. By 2020, Spark expects its wireless-network specific capex to be between 25%-35% of Spark’s overall capex envelope, up from 25% in the year ended 30 June 2017.

Spark plans to launch a 5G Innovation Lab in Auckland’s Wynyard Quarter Innovation Precinct before the end of this year that will allow partner companies to test and develop applications over a pre-commercial 5G network.

Spark cautioned that while it hopes to launch 5G services by 2020, any timeline is contingent on the government making spectrum available – which is problematic as the government has yet to formulate any clear policy on which spectrum bands it will make available for 5G, and when.

Moutter said Spark is proceeding with its 5G plans on the assumption that the government will ultimately go with the 3.5 GHz and 28 GHz bands, which are already being allocated for 5G in other markets. Moutter advised the government to complete the allocation processes for those two bands as soon as possible to ensure 5G services can be delivered in time for the 2020-21 America’s Cup in Auckland as an international showcase opportunity.

He also said the government should continue with its current work to define 600-MHz spectrum as a band for potential 5G use should continue at pace so that 5G can be rolled out more quickly to rural areas.

The briefing paper stresses that it is important for policymakers to recognize 5G is not a standalone technology or solution, but one that will operate together with previous generations of wireless technology and will be deployed as an overlay of existing network infrastructure. Therefore, policy settings need to support network operators having control over the evolution of their wireless networks.

“The current competitive market model, in which multiple wireless network operators compete against one another to grow their customer bases through product and service innovation and pricing, represents a good blueprint for the way 5G can be rolled out in New Zealand and would provide for more investment predictability and certainty over the coming decade,” Moutter said.

That last point appears to be in response to rival cellco Chorus, which has been lobbying the government for a shared-infrastructure approach to 5G in which one player builds 5G infrastructure that other operators can lease.

The paper is available here [PDF].

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